Tax Examination – Hot Tips…You Don’t Want to Miss!

Posted by Kelley LearcloseAuthor: Kelley Lear Name: Kelley Lear
Email: kelley.lear@redmoonsolutions.com
Site: http://blog.redmoonsolutions.com
About: Kelley is a member of the executive leadership team and leads our sales and marketing efforts at Red Moon Solutions. Kelley’s extensive experience in project management, product management, and consulting with Fortune 500 and Global 1000 clients is extremely important in this role.See Authors Posts (127) on Dec 6, 2011 | 0 comments

You know when you attend a tax or vendor conference in the tax industry…and you are sitting there wondering why you are sitting in this mind numbingly boring session? In fact, as your mind starts to wander, you begin to picture yourself sitting on a beach sipping a marguerita under a softly swaying palm tree, swishing down the slopes at Breckenridge with the wind whipping through your hair, or swinging that golf club and hearing that familiar (or not so familiar) “ting” as your ball explodes off the sweet spot on your driver and lands in the middle of the fairway…or anything but sitting in that painful PowerPoint display of bullet points and monotone discussion devoid of any passion or value? Have you even contemplated sticking a pen in your eye so that you could be carried out of there and rushed to the emergency room, just to avoid the remaining hour of that session? Well, I certainly have.

That was not the case in the session that I attended at the recent CORPTAX Users’ Conference in San Antonio, Texas! I was lucky enough to sit in on a session presented by a tax attorney by the name of Victoria Sherlock from KPMG called “Tax Examination – Hot Topics”. She started out the session with some dry humor, and I quickly realized not only was I going to get some rich content on tax examination management, but that she was also going to make it as amusing as all get out! Her stories were on topic, but funny and insightful. She was also not afraid to voice her opinion and share some truly useful thinking (not watered down for conference correctness). How refreshing. It is impossible for me to share all the rich content she provided during this session, but I thought I would at least share some of her “top advice” in this area of her extensive expertise. And, as she stated, the advice she usually would charge quite a bit of money for her clients to obtain. Very generous.

1. Find a “designated victim”. A nice sweet person with patience and competence to run manage your tax examinations. If you don’t have someone internally that is remotely like this, hire one.

2. The world will not end if you fail to respond to an IDR timely. Call them up at least two days ahead of time and ask for an extension. 98% of the time they will allow you more time.

3. IDR’s are ALWAYS negotiable! Drafts are negotiable as well as official.

4. When things are going badly…ask for a meeting. The IRS will always come. Make sure that the team manager is there. If things are really bad, ask for a territory manager.

5. If you are discouraged because you need to “train” your agent, don’t be upset, take it as an “opportunity” to train them to think like you.

6. Answering IDR’s requires strategy. The English language is not perfect, so make sure you are negotiating based on what will be best for your company in the end. Literal translation may work for you at times, while at others, you may not want to play that card.

7. When you respond to “Notices of Proposed Adjustments”, don’t just check the “disagree” box unless you already know you are heading to appeals, and an abbreviated response make sense.

8. Don’t feel bad about bringing in a trusted representative (attorney/consultant, etc.) early on…the main goal is to make sure everyone is playing by the rules, the same rules.

9. If the audit team comes to you with the proposal of “fast track”, then you probably want to take them up on this. If they propose it in a “lack luster” manner…don’t bite.

10. You really need to get that “voice on the phone” the technical guidance coordinator, on a plane and in the room with you.

11. Should I write a skeleton protest or a 100 pager? A skeleton protest is not usually the best option here. Always ask for a rebuttal and then file a real response to that rebuttal.

12. Preparing for your appeals, make sure you bring witnesses, and lots of them if possible. Operations folks are always the most beneficial during this process.

Well, as I am sure is typical with Victoria, she did not give you a “top ten” list. She added value with a “top twelve”. Hope you enjoyed. Please share your thoughts and tips. We would love to hear them!